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Wall Street Writes Bills, Washington Passes Them

In a stunning sign of the political resurgence of bankers, Wall Street lobbyists not only have the ear of lawmakers, they have their pens as well.

Rather than leaving it to members of Congress to draft legislation that softens financial regulations, bank lobbyists are helping to write it themselves, emails reviewed by The New York Times show. One bill that sailed through the House Financial Services Committee this month was essentially written by lobbyists for giant Citigroup.

After the House committee drafted a bill that would force regulators to exempt trades of certain types of derivative trading from the new Dodd-Frank regulations, corporate lawyers like Michael Bopp weighed in with their suggested changes, The New York Times’ Eric Lipton and Ben Protess write. “At one point, when a House aide sent a potential compromise to Mr. Bopp, he replied with additional tweaks.”

Banking lobbyists made 70 lines worth of recommendations for the House committee’s 85-line bill; two paragraphs prepared by the bank were copied word for word. The bill sailed through the House committee on May 7 and is now pending before both the Senate and the House. - Read more atThe New York Times

FINANCIAL BAILOUT PRICETAG CUT TO $21 B The cost of the government’s 2008 bailout of financial institutions originally was estimated to cost taxpayers $700 billion. But now it appears it will end up costing about $21 billion. That’s because banks have largely repaid the government, according to new estimates by the Congressional Budget Office . The remaining cost largely stems from assistance to American International Group (AIG), aid to the automotive industry and housing industry assistance. - Read the report here

OBAMA RESETS POLICIES FOR WAR ON TERROR President Obama’s speech on Thursday at the National War College signals a dramatic change in how the U.S. will fight wars and address threats of terrorism in the future. The Fiscal Times’ David Francis writes: “Obama’s speech was about slashing budgets as much as it was confronting new threats. The entire speech shone a bright light on the Pentagon’s evolving budgetary mandates. Sequestration and budget cuts of $600 billion during the next decade are expected to radically change the Pentagon while trimming a budget that had grown out of control since the war in Afghanistan began. Obama’s new strategy reflects this reality.” - Read more at The Fiscal Times

LERNER PLACED ON PAID LEAVE Lois Lerner, the Internal Revenue Service director of Exempt Organizations, was placed on administrative leave Thursday after refusing new acting IRS commissioner Daniel Werfel’s request to resign. Werfel’s request came after Lerner invoked her Fifth Amendment constitutional right against self-incrimination during a House Oversight Committee hearing Wednesday, when she and others were questioned about the IRS’s targeting of Tea Party political groups. . She will continue to draw a salary while on leave, per civil service rules. - Read more atPolitico

FURLOUGH FRIDAY speaking of the IRS, it is one of four agencies and departments that are closed today, as roughly 115,000 federal workers take their first sequester-induced furlough day. Three others that have closed their doors for the day are the Environmental Protection Agency, Department of Housing and Urban Development and the Office of Management and Budget. - Read more at The Fiscal Times